North Korean Economy Watch

From the Methodist Church of Great Britain:

This month, The Fund for World Mission will grant £5,000 to help the Church in North Korea run a food production company to help people there.

Steve Pearce, Partnership Coordinator for Asia and the Pacific, said: “Times are particularly hard for all the people of North Korea at the present time. The North Korean population is cut off and isolated from the rest of the world and dependent on the regime for their needs. Food is scarce for many – there are problems in the supply of humanitarian aid.

“Christianity is treated as ‘a bad element’ in this socialist country. Christians have been beaten, arrested, tortured, or killed because of their religious beliefs but local sources estimates the number of underground Christians to be at least 200,000, maybe many more, and many of them are imprisoned for their faith.

The British Methodist Church and the Ecumenical Forum for Peace, Reunification and Development on the Korean Peninsula have been developing common projects with Church representatives from North and South Korea, North America and Europe.

Read the full article here:
Methodist Church lends support to Christians in North Korea
Methodist Church of Great Britian
1/12/2009

Felix Abt, who runs the Pyongyang-based PyongSu Pharmaceutical Company, has launched a company to market North Korean art. 

From the Pyongyang Painters website:

Pyongyang Painters has the privilege to be one of the very few on-line galleries outside the Democratic People’s Republic of Korea (North Korea) permitted to sell art and to represent leading artists as well as new talents from this very special country. But unlike others, it is exclusively specializing on North Korean fine arts and will, over time, introduce you to the largest and most representative collection of artworks. Special attention will be given to female artists as well as promising younger talents. Buying with www.pyongyang-painters.com, you contribute to the development of art and artists in North Korea.

The initiators of this website are Felix Abt and his wife Huong who have been living in Pyongyang for many years and who have had the opportunity to get acquainted not only with the country’s institutions involved in fine arts but also with numerous artists across the country. A close partner in Pyongyang is the Paekho Arts Trading Company which is less famous than the Mansudae Arts Studio. But it is at least as dynamic and it enjoys fast growth thanks to its impressive pool of artistic talents.

We are also pleased to announce that Christine Cibert, an experienced French Art Curator & Cultural Events Coordinator & Free-lance Writer is an advisor and consultant to pyongyang-painters.com and to its clients. Christine has lived and worked in North Korea for several years and gave birth to a son in Pyongyang. Her expertise in North Korean fine arts and paintings is outstanding and we are glad that our clients can resort to her competent advice, in particular when it comes to special requests beyond the paintings shown on this website.

Since there is little exposure to the outside world the North Korean form of art is considered very pure. North Korean artists are loyal to their country and, like any other citizens, adhere to the country’s political philosophy. In the absence of influences by contemporary art trends from the rest of the world the painters have, in a unique manner, developed their own techniques and the use of colors in an original style.

The paintings exhibited include, among other things, a variety of beautiful sceneries of nature and of North Korean daily life. These pieces of artwork will give you a rare insight into the lives and thoughts of the people of this country.

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-1-9-1
1/9/2009

The Jochongryeon mouthpiece, Chosun Sinbo, reported on January 5 that North Korea is working to boost economic production by establishing “concrete attainment goals” in each sector in a “yearly, phased plan” from last year until 2012 in order to reach the goal of establishing a “Strong and Prosperous Nation” by the 100th anniversary of the birth of Kim Il Sung. The paper reported that the North had not made an official announcement regarding this plan, but that it was currently in the process of implementing a 5-year economic development plan

In the textile industry, North Korea is focusing efforts on upgrading equipment in five weaving factories, including major sites in Pyongyang and Sariwon, with the goal of increasing cloth production 400 percent by 2012. The newspaper also reported that North Korea is aiming to increase coal production over the next few years, with the goal of reaching 1980s-levels of production. Coal production peaked in 1989 at 43 million metric tons, and it is estimated that North Korea has over 20 billion metric tons of coal reserves, but the Bank of (South) Korea estimates that in 2007, the North mined a mere 24.1 million metric tons of coal due to a lack of electricity and spare parts. Many of North Korea’s coal reserves are below the waterline, and require constant electricity in order for pumps to maintain an environment in which mining can take place. Last year, in order to boost coal production, North Korea increased budget allocations for energy, coal and metal industries by nearly 50 percent.

This year’s New Year’s Joint Editorial placed heavy emphasis on the metals industry, and emphasized that efforts last year to modernize equipment and improve technology increased 2008 steel production by 150 percent at the Chollima Steel Complex and the Kim Chaek Iron and Steel Complex. The newspaper stressed that these plans were not merely wishful thinking, but that they were “the basis for meaningful achievements,” pointing out that last year, the North Korean cabinet increased investment into both basic industries and vanguard enterprises 49.8 percent. In 2008, North Korea either refurbished or newly constructed over 140 new production facilities, and, “in particular, actively promoted metal, instrument, science, and light industrial sectors.”

According to the newspaper, North Korea would continue to promote economic development in the new year, as well, citing the current global economic crisis and the need to build an independent economic foundation not reliant on South Korea.

North Korea’s “New Year’s Day Joint Editorial” lays out the government’s policy priorities for the year—similar to a US State of the Union address. In the editorial, which is quite long, the government committed to strengthening the military, ridding the peninsula of nuclear weapons, improving the economy (energy, agriculture, and transport) and improving the people’s quality of life.  Although the editorial is quite long, KCNA published a summary (KCNA link here, PDF here).

Today the Korean Worker’s Party threw itself a rally in Kim il Sung Square in support of the 2009 Joint Editorial. 

Here are some reactions in the press:
Jon Herskovitz in Reuters, Korea Times, AFP, Xinhua.

Daily NK
Park In Ho
1/1/2009

The marketplace has become an extremely important ground in North Korean people’s lives. 70 percent of North Korean households in the city live off trade, handicrafts and transportation businesses related to trade. If the jangmadang works well, people’s living situation is good, otherwise it is not. In the situation where the food distribution system has broken down, the whole economic existence of the populace is bound up in jangmadang trade.

Trade is bound to generate successful merchants but also failures, due to a lack of know-how or confiscation of products by the People’s Safety Agency (PSA), or simply because a competition system operates. These failures in the jangmadang do not have any second opportunity to rise again so they frequently choose extreme acts like defection, criminality or suicide. Failure is serious.

However, the revitalization of markets has caused great changes in North Korean people’s values. The individual-centered mentality among the people is expanding and the belief that money is the best tool is also spreading. Due to such effects, the North Korean communist authorities in 2008 made the regulation to prohibit women younger than 40 years old from doing business, but of course the people use all necessary means to maintain their survival.

Daily NK investigated the 2008 top ten items in the jangmadang, so as to observe developments in North Korean society.

1. Rice in artificial meat, the first instance of domestic handicraft

Since 2000, the most ubiquitous street food has been “rice in artificial meat,” which is made from fried tofu with seasoned rice filling. This food is found everywhere on North Korean streets. One can find women who sell this snack in alleys, at bus stops and around stations. It costs 100 to 150 North Korean Won.

Meanwhile, the most popular street food is fried long-twisted bread. Individuals make the fried bread at home and sell it on the street. The length of the fried bread is around 20 centimeters and it sells for 100 won.

In around 2005 corn noodles were popular on the streets, but now street-stands for noodles have largely disappeared due to the existence of a permanent store controlled by the state.

These days, if one can afford to eat corn noodles, at approximately 1,000 won for a meal, one can safely say that one is living comfortably.

2. Car battery lights North Korea

The reason why North Korean people like car batteries is that the authorities provide a reliable electricity supply during the daytime, when consumption is less than at night, but at night they don not offer it. The authorities shut down the circuit from around 8 PM to 9PM, and from 12 AM to 2 AM: when the people watch television the most.

As a result, the people charge their car batteries during daytime and use it at night. A 12V battery can run a television and 30-watt light bulb. If they utilize a converter, they can use a color television, which needs more electricity.

Ownership of batteries is a standard of wealth. Officials use electricity from batteries in each room. They usually draw thick curtains in their rooms, to prevent light shining through that might draw attention to their status.

3. The strong wind of South Korean brand’ rice-cooker, Cuckoo

A South Korean brand pressure rice-cooker called Cuckoo appeared as a new icon for evaluating financial power among North Korean elites.

It has spread from the three Chinese northeast provinces into North Korea. In North Korea, Chinese rice and third country aid rice, dry compared to Korean sticky rice, generally circulates, but if the lucky few use this rice-cooker, they can taste sticky rice the way Korean people like it.

There are Cuckoo rice-cookers from South Korean factories that arrive through Korean-Chinese merchants, and surely other Cuckoo products from Chinese factories. These two kinds of rice-cookers, despite having the same brand name, sell for different prices.

The Chinese-made Cuckoo sells for 400,000-700,000 North Korean Won (approximately USD114-200), while the South Korean variety costs 800,000-1,200,000 (approximately USD229-343). A Cuckoo rice-cooker tallies with the price of a house in rural areas of North Korea. According to inside sources, they are selling like wildfire.

4. An electric shaver only for trips

The electric shaver is another symbol of wealth.

It is not that they use electric shavers normally, because one cannot provide durability. At home, North Korean men generally use disposable shavers with two blades made in China or a conventional razor. However, when they take a business trip or have to take part in remote activities, they bring the electric shaver.

There are North Korean-made shavers but most are imported from China. Among Chinese products, you can see “Motorola” products and fake-South Korean products with fake labels in Korean. A Chinese-made electric shaver is around 20,000-40,000 North Korean Won.

5. Chosun men’s fancy shoes

Dress shoes are one of the most important items for Chosun men when they have to participate in diverse political events, loyalty vows or greeting events at Kim Il Sung statues on holidays. Right after the famine in the late 1990s, it was considered a symbol of the wealth, but now general workers, farmers and students are wearing dress shoes.

The shiny enameled leather shoes with a hard heel cannot be produced in North Korea because of a lack of leather. The North Korean authorities provide the National Security Agency (NSA) and officers of the People’s Army with dress shoes, which are durable but too hard and uncomfortable.

Shoes for general citizens and students are mostly made in China and some are produced in joint enterprises in Rajin-Sunbong. The price of shoes ranges from 30,000 to 100,000 Won depending upon the quality.

6. Cosmetics prosper despite the economic crisis

Cosmetics and accessories for women are getting more varied. Lately, false eyelashes have appeared in the jangmadang in major cities. Chinese cosmetics are mainly sold, alongside fake South Korean brands. In Pyongyang, Nampo, Wonsan and Shinuiju Chinese and even European cosmetics are on sale.

“Spring Fragrance,” a North Korean luxury cosmetics brand, is famous for being Kim Jong Il’s gift that he presents to women soldiers or artists when he visits military units or cultural performances. It costs more than 200,000 North Korean won.

Lotions for women, made in China, are approximately 2,000-4,000 won, foundation cream is 3,000-5,000 won, and lipstick is from 500 won to 2,000 won. Hand cream is 3,000-5,000 won.

7. Hana Electronics recorder, the biggest state-monopoly production

“Hana Electronics” was originally set up to produce CDs and DVDs of North Korean gymnastic performances or other artistic performances, so as to export them foreign countries. The company has been producing DVD players since 2005.

Due to the state monopoly, the DVD player of the Hana Electronics dominates the market. North Korean people call a VCR and a DVD player a “recorder.” Since around 2005, after the booming interest in South Korean movies and dramas, the players have been selling very well.

At the beginning, North Korean visitors to China brought the DVD or CD players into North Korea, but as they got popular among the people, Chinese-made players were imported from China and since 2006 they have been really popular in every jangmadang.

Accordingly, since 2006, the authorities have started blocking the importation of the Chinese player and are selling the Hana Electronics players, which sell for around a 20 or 30 percent higher price than Chinese players in state-run stores. Now, they can be sold in the jangmadang by private merchants and comparatively free from inspection by the PSA. The prices are 130,000-150,000 won.

8. Bicycles are basic, the motorcycle era is here now

In major cities, numbers of motorcycles are increasing. Especially in border regions where smuggling with China is easier than in other cities, motorcycles are common.

The motorcycles are ordinarily used for mid or long distance business. Most motorcycles are made in China and some are Japanese second-handed products, which sell for 1.5-2.5 million won. 125cc new products are over 5 million won. The cheapest second-handed motorcycle is 500,000 won.

9. Vinyl floor covering for the middle class and vinyl for the poor

Demand for vinyl floor coverings and vinyl has been increasing since the late 1990s, when residential conditions improved. In the late-1990s people had to use sacks of cement or Rodong Shinmun (newspaper) as a floor covering, but now they are using vinyl floor coverings.

Uses for vinyl are unimaginably diverse: from a basic protection against wind and cold to when people take a shower at home in the vinyl tunnel hung on the ceiling of the bathroom.

Depending on the thickness and width, there are four or five kinds of vinyl in the jangmadang for from 150 to 500 won. Vinyl floor covering is a Chinese product selling for from 3,000 to 10,000 won.

The Globe and Mail, Toronto (via Cancor)
Nathan Vanderklippe
12/29/2008

Maybe it was the traditional hotpot meal with dog meat, maybe it was the pre-game beer or maybe it was the unsettling gaze of the Great Leader and the Dear Leader, their portraits glaring down from high above the Pyongyang Ice Rink. Whatever it was, Hockey Night in the (Former) Axis of Evil, a game that may well qualify as the most peculiar of the year, did not begin well.

On one side was a team of 18-year-old North Koreans shod in 20-year-old leather skates. On the other, a team jam-packed with the world’s hockey superpowers: nine expatriate Canadians plus two Finns and a Swede, playing in what they believe was the first-ever international amateur hockey game inside the world’s most reclusive country.

And the Canucks and Co. not only started slowly but ended up falling 11-9 — the damage to Canada’s international hockey reputation still unknown.

In fact, within minutes of the opening face-off, the fast-passing North Koreans had already bagged four unanswered goals. Goalie Scott Lau, a lawyer from Toronto (team nickname: “DPRK Five-Hole”), blamed the arena lighting. “It was kind of dark,” he said. The arena eventually cranked up the brightness. It helped, but only a little.

“I think he let in five of his first six shots near the net,” said team captain Ray Plummer. “They were going wide, he managed to block them and put them in the net.” That, of course, was before the North Korean team relented in the interest of being good hosts.

Three inauspicious periods later — complete with smoke breaks at intermissions to watch the DPRK’s sole Zamboni at work on the DPRK’s sole rink — and the Good Guys strode off the ice in defeat.

Not that anyone really cared. For these expatriates, who live in Asia and work as students, teachers, venture capitalists, hoteliers and diplomats, the October game fulfilled a dream to “go where no team has gone before.”

“How many people go to the DPRK — not many! And how many play hockey there as amateur hacks — just us!” said Mr. Plummer, an Atlantic Canadian who, in his younger and speedier days, turned down a contract in the OHL to attend university instead. “My father said stick with hockey and you’ll go far,” he said. Little did he know.

Mr. Plummer, a construction project manager, met his wife at centre ice in Beijing, where teams of expats square off during winter months in beer-league play. Similar leagues have sprouted up wherever puckheads and hosers have landed, and the Beijing players have for decades competed in annual tournaments in Shanghai, Bangkok, Hong Kong and Taipei.

Over the years, they also began playing in Ulan Bator against Mongolians who compete on outdoor ice in minus 35 temperatures. Hockey has become a channel for philanthropy, and the ex-pats have donated equipment, lessons and international travel to Mongolian kids who otherwise couldn’t afford to play.

But several years ago, Mr. Plummer began searching for a new adventure. What better, he figured, than playing in North Korea? Few people are allowed into the hermit nation; fewer still come to play hockey. Pyongyang has hosted several International Ice Hockey Federation games, but the country has only a few dozen hockey players and they don’t play in globetrotting beer leagues.

“We thought, ‘Here’s a crazy place to go. Let’s play hockey, but go as tourists and experience something barely anybody experiences,'” Mr. Plummer said. He contacted a travel agent with experience getting foreign visitors into North Korea to ask if it might be possible. This summer, for reasons unknown, they were invited to come. A few months later, after shelling out $2,000 each for the trip, they found themselves on a Russian-made Tupolev jet bound for a country where the roads are empty, the cities go dark at night and portraits of Kim Il Sung and Kim Jong Il abound.

“It was truly like going to another planet,” Mr. Plummer said. They hit the tourist sites, were lectured about the evil ways of the “Imperialist Americans” and travelled to the demilitarized zone dividing North and South Korea, where they discovered the Maple Leaf proudly displayed as part of North Korea’s own Axis of Evil.

And they suited up for a second game against the young North Koreans, who play on the country’s development team, and will likely one day compete at the national level. The ice was Olympic-sized, the referee an official with the IIHF. But for all that, they lost again, this time 6-4.

“They played Soviet-type spread-out, passing, skating, circle the puck,” Mr. Plummer said. “They’re not great, and there’s not a big pool of players to pick from. But they’re better than old, ex-pat foreigners who are just up there for some tourism and hockey.”

After the game, after taking photos with the young players whose language they couldn’t speak, the expats offered their sticks as a token of friendship. The North Koreans offered a retired set of national team jerseys in return. Mr. Plummer plans to send one of them to the Hockey Hall of Fame in Toronto.

Olivier Rochefort, one of the team’s leading goal-scorers and the director of operations for the Beijing Radisson SAS hotel, can scarcely believe it. Not only has he traded slap shots with North Koreans — he now has a shot at something even greater.

“We need to autograph that jersey,” he said, laughing. “That’s the only way my name’s going to be in the Hockey Hall of Fame.”

According to an anonymous qoute by a South Korean intelligence official in the Choson Ilbo:

“Especially, North Korea developed its own DVD player in 2006 with a view to developing its own IT industry, this ironically provided momentum for the spread of South Korean soap operas.”

I had assumed the DPRK imported DVD players. 

Read the full article here:
Pyongyang Bids Korean Wave to Recede
Choson Ilbo
12/26/2008

On my second visit to North Korea in 2005, I purchased a copy of Let’s Learn Korean (Chosonmal Baeunun Chaek, 1989) by the Pyongyang Foreign Languages Books Publishing House. 

In its pages you will find many phrases which will facilitate your visit to the DPRK:

“This camera is for my personal use” 

“Please get me a porter”

“Give me a first-class, one-way ticket to Pyongyang”

” I want to see the Tower of the Juche Idea”

“Let us drive the US imperialists out of south Korea”

“Abolish nuclear weapons”

“The new era of socialism and communism”

“The children are the reliable successors of our revolution who will brighten the future of our fatherland”

“Man must become a revolutionary before becoming a doctor”

and..

“In a nutshell, the idea of Juche means that the masters of the revolution and construction are the masses of the people and that they are also the motive force of the revolution and construction”

I have divided the book into four parts to make it easier to download (although each part is rather large):

Download: Part 1
Download: Part 2
Download: Part 3
Download: Part 4

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-12-8-1
12/8/2008

The North Korean online magazine ‘Our Nation (uri minjokkiri)’ emphasized on January 1 that development of national defense industries would be prioritized, stating that it was “the best way to move forward and harden a strong national defense while at the same time developing the entire economy.”

In an article titled, “The Path to Economic Construction of the Military-first Era,” the website reminded the reader of the goal of building a strong and prosperous nation by 2012, and stated that Kim Jong Il had said that building up the economy was the “main line of construction for the building of a Strong and Prosperous Nation.” It went on, “Today’s era is the era in which the national economic strength is determined by the amount of development of the national defense industries,” and, “National defense industries are in a leading position, while the independent establishment of the core economic structure is necessary, and a strong economic base can be constructed.”

The magazine emphasized, “The might of heavy industry can be further strengthened following the completion of the basis of the national defense industries, also ceaselessly developing light industry and agriculture.” The article also stressed that as North Korea’s national defense industries are at a comparatively high level internationally, matching that of the United States, and that he national economy overwhelming potential is easy to see.

The article noted that today’s military competition between nations is practically scientific and technological competition, and, “strengthening of national defense in every way based on science and technology, and establishing a framework of science and technology and deciding to quickly develop a strong and prosperous nation by focusing on science is really the path for building the economy in the Military-first Era.”

The magazine emphasized that this military-first era economic building plan was “truly for the people, and was the most civic path to prepare national economic strength for public services.” “In accordance with changes in the political atmosphere and actual conditions, the amount of energy applied to building of national defense and economic construction, citizens’ livelihoods, or other realms could vary, but the true requirement of the building of the socialist economy is to ceaselessly raise the level of the livelihoods of the people, and ultimately, this goal can never waver.”

In a recent Korea Times article, Andrei Lankov (citing Brian Myers) highlights how the DPRK has changed the narrative of its raison d’être in response to the growing realization among its people that South Korea is not the poor, exploited US colony the propaganda portrays it to be. 

Quoting from the article:

Until some time a decade ago, the North Korean populace was expected and required to believe in a very simple world picture.

The North, led by the glorious dynasty of omniscient and benevolent rulers, was the best society on the face of the Earth, much envied and glorified by the less fortunate peoples of other countries.

The rest of the world was inferior, though people in the socialist countries admittedly fared better than the helpless inhabitants of the capitalist hell.

But worst of all was South Korea, the colony of the U.S. imperialists who exploited it with unparalleled brutality.

However, around 2000 the North Korean watchers (well, actually a handful of them with the time and ability to read the official press systematically) began to notice a new image of the South emerge.

Brian Myers, the ever observant reader of North Korean press and fiction first noticed the signs of this quiet transformation when it was only beginning.

Soon it became clear that he was right. A new propaganda line was being born. Interestingly, this time the new line was introduced not through newspapers, but in a more subtle way, through works of fiction, which also have to be approved by the supreme ideological authorities.

The new South Korea which emerged in these writings wasn’t so poor. Actually, it was not poor at all. The characters in recent North Korean novels, which deal with the imaginary life of the South, enjoy a lifestyle far superior to that of the average North Korean. They drive cars, dine out easily and live in expensive houses.

As Myers pointed out, the North Korean authors have poor ideas of how expensive Seoul real estate has become, so they sometimes overestimate South Korean’s income levels. In one novel, a young South Korean journalist buys a house in a very expensive neighborhood after merely a few years of work.

Does this mean that the new image of the South is positive? Of course not! South Korean society might be rich, the propaganda operators say, but it is still inferior to the North.

The South Koreans had to pay a terrible price for their success: they were deprived of their precious national identity.

The cultural uniqueness and racial purity of the great Korean nation has become endangered. Mixed marriages are mentioned frequently and in a way that makes readers believe they are between the same lusty Americans and young Korean women.

However, the propaganda insists, the South Koreans themselves are not happy about this situation. They dream about liberation and purification, and their hopes are pinned on Pyongyang and, above all, the Dear Leader himself. In recent years, North Korean propaganda has insisted that Kim Jong -il is worshipped in the South. Similar statements were made earlier as well.

According to this new logic, the North is a torchbearer, a proud protector of nationhood and racial purity. South Korean prosperity is tainted and hence should not be envied.

The North must fight for the ultimate salvation of the South, and such salvation can be achieved only through unification under the North Korean auspices, so all South Koreans will be able to enjoy the loving care of the Dear Leader. Only American troops and a handful of national traitors prevent this dream from coming true.

Lankov (and Myers) speculate that the North Korean government changed the narrative in response to unauthorized information permeating the country.  In a related note, the overt propaganda in many North Korean films has also been reduced in recent decades.

Most importantly, Lankov reminds us that nationalism is not a viable long-term political strategy—even in North Korea.  North Korean Juche was supposed to liberate the Korean people and deliver on material progress, but it has not succeeded.  From top to bottom, many North Koreans already know this.